Graphene reinforced metal matrix composites have received a lot of attention from academia and industry due to their excellent mechanical properties. In this paper, the machinability of graphene reinforced aluminum metal matrix composites (Gr/Al MMCs) during micro-machining is investigated by finite element method. A three-dimensional modeling program based on the Python language is developed independently, this program can generate graphene with random distribution of orientation and position. A three-dimensional two-phase finite element model considering the cutting edge radius is established to simulate the micro-machining process of Gr/Al MMCs. Embedded element method is used in the model to more efficiently simulate the interaction behavior between graphene and aluminum matrix during micro-machining. The accuracy of the model is verified by indirect experiments. Stress distribution, tool-graphene interaction, chip formation, cutting force and specific cutting energy during micro-machining are investigated with different uncut chip thickness. The simulation results show that graphene inhibits stress propagation, resulting in the formation of a stress field with irregular contours within the matrix. Continuous serrated chips are generated during the cutting process. The addition of graphene increases the magnitude and fluctuation of cutting forces.